Pixel P&L: Tencent Gaming Surge, Krafton's AI Exit Offer, S8UL Expands

Welcome to another Pixel P&L edition. This issue takes 4 minutes to read. If you only have one, here are the 5 most important things:

• Tencent posts 15% revenue growth as AI transforms gaming and advertising.

• Krafton offers staff up to 36 months' severance in major AI pivot, despite record earnings.

• Riot's Valorant hits a massive milestone with 50 million monthly users in China.

• S8UL Esports expands to Free Fire by acquiring Team Elite's championship roster.

• Ubisoft mysteriously delays earnings and halts trading. 

Let's get into it.

Tencent Reports 15% Revenue Growth as AI Powers Gaming and Ad Performance

Chinese tech giant Tencent Holdings reported third-quarter revenues of RMB192.9 billion ($27.1 billion), up 15% year-over-year, driven by AI-enhanced gaming operations and advertising technology. Non-IFRS net profit rose 18% to RMB70.6 billion ($9.9 billion).

The company's gaming division generated RMB95.9 billion ($13.5 billion) in value-added services revenues, climbing 16% annually. International games surged 43% to RMB20.8 billion ($2.9 billion), while domestic titles including "Delta Force" and "Valorant Mobile" drove 15% growth in China.

Marketing services revenues jumped 21% to RMB36.2 billion ($5.1 billion) as Tencent deployed AI-powered ad targeting through its new AIM+ automated campaign solution. The technology improved cost-per-thousand impressions while increasing user engagement and ad load.

"Our strategic investments in AI are benefitting us in business areas such as ad targeting and game engagement," said CEO Ma Huateng, highlighting the company's HunYuan foundation model's image and 3D generation capabilities. Operating margin expanded to 38% from 37% year-over-year.

Krafton Offers Severance Packages to Korean Staff Amid AI Pivot

South Korean game publisher Krafton has launched a voluntary resignation program offering employees severance packages worth six to 36 months' salary as it transitions to becoming an "AI-first company."

The maker of PUBG and Subnautica 2 announced the initiative targeting Korean staff on November 12, following its October declaration to prioritize AI as "a central and primary means of problem-solving" across operations. The move comes after Krafton reported record-high cumulative performance in its third-quarter 2025 results.

Krafton maintains the restructuring is not aimed at reducing headcount. "The core purpose is to support members in proactively designing their growth direction and embarking on new challenges both inside and outside the company amid the era of AI transformation," a company spokesperson told Business Korea.

The severance offer varies based on employee grade and length of service. Krafton said it plans to help staff "autonomously" decide whether to continue with the company's AI-focused direction or pursue opportunities elsewhere.

The publisher joins growing numbers of gaming companies integrating AI technology into development and operations.

⚡️Quick Bytes

Riot's Valorant Surpasses 50 Million Monthly Users in China

Riot Games' Valorant franchise has exceeded 50 million combined monthly active users across PC and mobile platforms in China. The mobile version, launched August 19, 2025, successfully differentiated itself from the PC edition that debuted July 12, 2023. Riot and Tencent's dual-platform strategy treated the versions as complementary ecosystems rather than a single cross-platform title.

S8UL Esports Acquires Team Elite's Free Fire Roster

Indian esports organization S8UL has acquired Team Elite's Free Fire MAX roster, forming S8UL Elite. The lineup features in-game leader Lokesh Karakoti and includes championship-winning players from India's Free Fire circuit. Co-founder Naman Mathur said the move reinforces S8UL's commitment to competing at the highest level across multiple titles. S8UL recently represented India at the Esports World Cup in Riyadh.

Ubisoft Postpones Earnings Release, Requests Trade Suspension

Ubisoft has delayed its H1 2025-26 financial results and requested Euronext suspend share and bond trading starting November 14. The French publisher provided no explanation, stating only it would announce when trading resumes and publish results "in the coming days." Ubisoft shares have fallen 49.44% year-over-year and declined 95.51% over five years amid ongoing business challenges.

⚔️Side Quest

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💡Did You Know

Surgeons who play video games demonstrate measurably superior performance in the operating room, making 37% fewer errors and completing procedures 27% faster than their non-gaming counterparts. Research indicates that video game proficiency serves as a strong predictor of specific surgical skills, particularly those requiring hand-eye coordination, spatial awareness, and precise motor control.

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